Monthly Archives: November 2008

Obama Nominates Hillary Clinton for Secretary of State.

By Marc Seltzer; originally published on November 21, 2009, at politicsunlocked.com

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The nomination of Senator Hillary Rodham Clinton to be the nation’s next Secretary of State says a lot about President-elect Barack Obama.

The nomination shows Obama’s confidence to bring a former rival into his inner circle. Throughout her presidential nomination campaign, Senator Clinton demonstrated intelligence and charisma, not to mention the popularity and good will she earned as New York’s U.S. Senator and as First Lady from 1992 to 2000.

That said, Hillary Clinton does not have universal appeal.

According to an August 2008 Gallup survey, 72% of Republicans viewed Hillary Clinton negatively, although she was viewed favorably by 80% of Democrats and by 54% of all respondents, including independents.  Her vocal role in the health care reform campaign in 1992 was derided as arrogant or, at least, beyond the responsibility of the First Lady.  Her very presence, imbued with contemporary feminism, has always rubbed some conservatives the wrong way.

Despite polar reactions to her in the United States, Clinton should be well received by the international community.  More than any other figure in today’s American political landscape, she symbolizes theBill Clinton presidency’s international popularity.  He was admired for his eloquence and prized for his effort to bring about negotiated solutions to international conflicts. It is not that Senator Clinton can share responsibility for her husband’s accomplishments, but that through her appointment, Obama undoubtedly sends a clear signal of the kind of international relations he seeks.

After eight difficult years of U.S. foreign policy marked by faulty intelligence and planning, abrogation of international rules, and unilateral action, many in the international community are eager for change. Obama campaigned for a return to respect for conventions and negotiation in international leadership. His campaign was followed widely with great enthusiasm throughout the world.

With the nomination of Hillary Clinton, Obama has smartly linked with the success of the prior Democratic administration and has immediately created some international foundation.  Hillary Clinton not only brings the goodwill engendered from the Clinton Presidency, but is also failry well-known politically.

While she was criticized by her party for her initial vote authorizing war in Iraq, in her role as Secretary of State, a voting record demonstrating the willingness to use force if diplomacy fails, is a mark of strength.  Her personal familiarity with world leaders, through extensive official travel as First Lady and Senator, should not be discounted either. Obama has chosen both an able politician and a person symbolizing engagement in multilateralism from a position of power.  He has made the most of this high level appointment.

Upon leaving the Senate, Hillary Clinton must forgo the opportunity to shepherd health care legislation through Congress.  However, Senators Baucus and Kennedy, among others, are stepping ino the lead.

As for Republicans harboring disapproval of Hillary Clinton, she may yet win them over in the role of Secretary of State, where strength and assertiveness are viewed as assets.

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Our Government in Action — Will Stimulus Succeed?

By Marc Seltzer; originally published on November 17, 2008, at politicsunlocked.com

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Know Your History
The Federal Reserve lowered interest rates back in 2007, with hopes of persuading businesses to borrow more money, bolstering their operations and growth.  Unfortunately, there is a considerable lag time between when rate cuts are enacted and resulting increases in business activity occur.  These rate cuts may have stopped even more dramatic declines than we are currently seeing, but they certainly have not reversed the downward slide in stock prices or business activity leading the global recession.

Consumer and business spending reflects confidence in stable prices, employment and business prospects.  As exploding oil prices sucked up a disproportionate share of family budgets and business profits and as real estate values declined, confidence fell.  Now, with the unemployment rate rising significantly, people are increasingly less confident, and more importantly, spending less, regardless of whether they have a job or not.

Now What?
The talk in Washington and near water-coolers around the country, concerns fiscal policy related to revenue and spending.

There are two approaches:  Lowering taxes to leave money in private hands and government spending to boost commercial activity and jobs.

Polls have found that the middle class tended to pay off debts and save for a rainy day with recent tax rebates, although these rebates were meant to stimulate spending in the economy.  Small tax cuts for a distressed middle class may ease hardship in the heartland, but have not stimulated the economy as predicted.

On the other hand, rebates for the lowest income segment of society are immediately put back into the economy, being used on day-to-day necessities.  Tax cuts for wealthy Americans may promote entrepreneurial enterprise, but were already significantly lowered during the Bush administration.

President-elect Obama campaigned against the widening gap between the richest members of society and the middle class, so it is unlikely he will lower high-end income taxes further.  However, Obama may decide to delay repealing Bush’s tax cuts for the wealthy, so that in the near term, this money could enter the economy directly rather than being paid to the government.

Government spending programs also face a significant delay from the passage of legislation until full implementation.  If we could predict recessions more than a year in advance, it would be highly advantageous to commence most of our nation’s infrastructure spending before recessions and slow public spending when the economy heats up.

Traditional stimulus legislation allocates public money for infrastructure, although bailing out the auto industry could also be seen as maintaining or promoting economic activity.  Spending on defense programs such as FDR’s Manhattan Project or Reagan’s Strategic Defense Initiative, “Star Wars,” also created jobs, as did civilian spending, such as the Kennedy’s Moon Mission and the great dams of the Tennessee Valley Authority.  “Star Wars” led to a boom in civilian software and Internet technologies, which were responsible for a lion’s share of the prosperity and productivity gains in the 1990s.

President-elect Obama gave a hint of his thinking on fiscal stimulus recently, responding to a reporter’s question about aid to the auto industry, “It should be a bridge to somewhere, not a bridge to nowhere.”

The real risk with government spending is not deficit, but waste.  Temporary deficit spending that produces a stronger economy, more prepared to compete in the global marketplace, is well worth the cost.  Infrastructure such as bridges, ports, green technology and alternative energy or even a trained and educated workforce, that advances the productivity and competitiveness of the nation, creates employment and serves the long-range national interest.

However, if the money only temporarily stimulates jobs and spending, but produces no long term productive gains, it will be just a “bridge to nowhere,” the moniker attached to an expensive and unnecessary Alaskan pork-barrel spending project.  Such wasteful spending not only uses up limited resources, but increases the deficit without providing improvement to the foundation of our future economic prosperity.

Health Care on the Horizon

By Marc Seltzer; originally published on November 17, 2009, at politicsunlocked.com

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President-elect Barack Obama made health care reform a central tenant of his campaign.  The fact that so many Americans are not covered and that coverage is so costly for those who are, brought the public together behind Obama’s call for change.

Recent polls confirm a substantial consensus for government action on health care.

Ninety-two percent of Obama supporters, 88 percent of undecided voters, and 57 percent of McCain supporters in an August 2008 WorldPublicOpinion.org poll, recognized that the government bears some responsibility for the health care of its citizens.  This may not be a call for nationalized health care as was toyed with during the Clinton administration, but it does signal government involvement in a health care solution will be welcomed. 69 percent of respondents also said the government was “doing a poor job” ensuring basic health care needs are met.

Obama’s proposals, voiced prominently during the campaign, call for federal regulation of insurers andpublic spending to help uninsured Americans obtain coverage.  Keys to any new legislation are likely to be mandatory coverage for pre-existing conditions, tax credits for small businesses that insure their employees, fees for large corporations who don’t, coverage of all children and subsidies for those that need help with premiums.

Obama estimated the costs of reform to be $50-65 billion and suggested that a repeal of Bush tax cuts for upper income Americans would offset increased spending in the federal budget.

The real question now is what shape health care reform will take in light of the financial crisis. President-elect Obama has put economic recovery at the top of his agenda and hinted that other issues will be considered in this light.

The concern on health care reform is that tax increases for the wealthy and for some businesses could negatively impact economic growth.  With economic indicators bleak, and all eyes on fiscal stimulus, the country can ill-afford to burden any segment of the economy.

Health care policy experts are speculating on a limited phase-in of reforms, with insurance for children touted as a first step. Longtime advocates for reform, such as Senator Ted Kennedy, are preparing draft legislation in time for inauguration day on January 20th, 2009.

The new president is all about pragmatism, so he will undoubtedly consider any potential harm to the economy before taking action.  However, there is reason to expect progress on health care.

Obama has spoken passionately about health care from the very beginning of his campaign and has stated how crucial it is to improving the lives of middle class Americans.  His own mother faced “preexisting illness” denial-of-coverage issues for treatment of her terminal ovarian cancer.

This President will begin his term with a substantial electoral victory, strong majorities in the Senate and House of Representatives, and public opinion in support of government action.

This is a mandate for change and the power to see it through.